U.S. Haemophilia Group Bioverativ Agreed To Be Bought Over By Sanofi For $11.6 Billion

01/25/2018

The presence of French pharma company Sanofi in treatments for rare diseases is expected to be strengthened with its decision to buy U.S. haemophilia specialist Bioverativ for $11.6 billion.

For the French company, this is its largest deal in the last seven years.

It is being predicted that 2018 would turn out to be a year where there would be a significant increase in the number of mergers and acquisitions in the pharma market. In recent years there is a growing trend in the industry about larger pharma companies getting interested in smaller biotech firms. And Sanofi’s latest acquisition comes at amidst such a global business environment.

Sanofi has agreed to pay a premium of 64 percent to the price of the shares of Bioverativ at the close of trade on January 19 as the French company has also agreed purchase all of the outstanding shares of Bioverativ for $105 per share in cash.

Early last year, the haemophilia drugs maker Bioverativ was detached from Biogen Inc.

Sanofi has been unable to make any successful takeover deals for years until this deal and this marks a possible return of the company to the path of deal-making. The alleged hostile takeover of U.S. biotech company Genzyme in 2011 for $20 billion by Sanofi was the biggest of the acquisition by the company.

In 2016, Sanofi was unable to strike a deal to acquire California-based cancer specialist Medivation which was ultimately bought over by Pfizer. And last year, Swiss biotech company Actelion was bought over by Johnson & Johnson where Sanofi was also a contender but failed to secure the deal that time also.

New drugs in the area of treatments for haemophilia are changing the landscape which makes the market dealing with such drugs assumes importance and is one that is fast evolving. Treatment of the inherited condition of haemophilia is being disrupted as traditional approaches to tackling the disease is being replaced by gene therapy going ahead.

181,000 people who are affected by the disease worldwide forms part of the sector that is valued at around $10 billion in yearly sales. Sanofi said. predicted to record a growth of 7 per cent a year till 2022, haemophilia is considered to be the largest market for rare diseases, the company added.

Immediate addition to the business earnings per share in the current fiscal for Sanofi is anticipated by the company through the deal and it also expects a 5 per cent n 2019.

But the high cost of the deal is being questioned by some.

“Bioverativ looks a relatively expensive acquisition. It is logical in terms of building around Sanofi’s presence and pipeline in rare diseases and haemophilia, though management may have to argue against concerns on competition,” analysts with Jefferies wrote in a note to clients.

“The obvious parallel is Shire’s highly unpopular acquisition of Baxalta; but Sanofi’s 2011 acquisition of rare disease specialist Genzyme was also unpopular at the time, yet has it turned into a major success story,” analysts with Kepler said.

“We have the means to make further takeovers,” added Brandicourt on a conference call, without going into further details.